F&O Strategy: Buy Apollo Tyres, Radico Khaitan, Escorts Kubota, recommends Rupak De in strong market today

Stock market today: Early on Monday, the domestic benchmark indices, the Sensex and Nifty 50, rose in response to a surge in their US counterparts and inflows of foreign funds.

Following US Fed Chair Jerome Powell's recent address at the Jackson Hole meeting, when he indicated that the time had come for policy to be relaxing and hinted at potential rate cuts in September, markets started the day on an upbeat tone.

At 11:15 IST, the Nifty 50 index was up 0.64% at 24,983.10. Sensex gained 0.68%, closing at 81,645.82.

A technical analyst stated that a fresh long buildup is seen in the Nifty 50 as the markets have started the week positively on global cues. If the index manages to sustain above 25,000 throughout the day, then call writers at this strike can unwind their positions, which would add fuel to the rally. The immediate support for Nifty 50 is placed at 24,900-24,800 range.

Technical views by Rupak De, Senior Technical Analyst, LKP Securities on F&O market

Bank Nifty

For Bank Nifty the last expiry date was Wednesday, August 21. The Bank Nifty has been sustaining above the critical near-term moving average, the 21 EMA. The index is also hovering just above the previous consolidation high. Overall sentiment appears positive, with immediate resistance at 51,150. A decisive move above 51,150 could trigger a rally towards 51,500. Support is placed at 50,770.

Open Interest Analysis:CALL writers added substantial positions at the 51000 and 51,500 strikes on Friday; whiles no significant Put writing was visible. Maximum CALL and PUT open interest was seen at the 51,000 strike, indicating a range bound trading in the near term. Currently the CALL writers are slightly out numbering the PUT writers for current weekly expiry.

Nifty 50

For Nifty 50 the last expiry date was Thursday, August 22. Nifty 50 saw another day of subdued movement. The RSI indicates a bullish crossover, and the trend stays positive, with the index closing above the 21 EMA. The market appears inclined toward a “buy on dips” approach as long as it remains above 24,650. On the upside, Nifty 50 encounters resistance at 24,850-24,900/25,000. Conversely, a drop below 24,650 could lead to a significant correction.

Open Interest Analysis:CALL writers added substantial positions at the 24,800 strikes on the first day of the current expiry, whereas PUT writers added significant positions at 24800 and 25000 strikes. Maximum CALL open interest was seen at the 25,000 strike followed by 24800, whereas maximum PUT open interest was seen at 24,800, followed by 24500, indicating a broader range for the market. Both PUT and CALL writers remained equally active in weekly expiry.

Technical stock recommendations for the week

Buy Apollo Tyres at ₹508; Target Price: ₹555; Stop Loss at ₹479

The stock has given a consolidation breakout on the daily timeframe, moving up after finding support at the 200-day moving average (DMA). A hidden positive divergence is visible in the daily RSI, suggesting a potential positive reversal in price momentum. On the higher end, the stock could move towards ₹555, while support is placed at ₹479.

Buy Radico Khaitan at ₹1,857; Target Price: ₹2,050; Stop Loss at ₹1,749

The stock has given a W-shaped recovery on the daily chart. Besides, the price has given a consolidation breakout on the daily timeframe. A positive divergence is visible in the daily RSI, suggesting a positive momentum. On the higher end, the stock could move towards ₹2,050, while support is placed at ₹1,749.

Buy Escorts Kubota at ₹3,875; Stop Loss at ₹3,775; Target Price: ₹4,100

The stock price has stabilised at its 100-day EMA after correcting from its high, and it recently broke its swing high following several consolidation sessions. A closing above the 21-day EMA, coupled with a bullish crossover in RSI, further supports a bullish outlook. These technical indicators suggest a favourable risk-to-reward ratio, making it an opportune time to buy the stock at the current market price with the stoploss ofRs 3,775, for the target levels set at ₹4,030 and ₹4,100.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.